CEO (Chief Executive Officer) of Rosneft Igor Sechin has made a business trip to PCK Refinery in Germany owned by the oil company he helms, as chronicled by the company’s press service on 3 July 2019. The press release published as well as some similar, albeit more exuberant, simultaneous releases highlight Sechin’s commendation of his company’s employees “for timely measures taken to prevent damage to the equipment and refinery shut-down, prevent the risks of damage to the environment” (quoted from the PR), meaning the excessive content of organic chlorides in the oil delivered over the Druzhba pipeline. He praised the company’s management for organisation of complex supplies logistics, bypassing the oil pipeline via ports. He also said that, “In accordance with the instructions from the country's authorities to tighten control over the quality of oil, it was decided to attract professional surveyor companies at all stages of crude transportation. Russian and European consumers should be confident, that the crude they receive fully conforms to quality standards of the crude provided by Rosneft to the pipeline system.” (quoted from the PR)
In this vein we must remind some controversial episodes of the interaction with our partner:
- just half a year ago a draft bill about trunk pipeline transport was blocked, despite the Russian President’s instructions. Among other things, the bill included a section about oil and petroleum products quality control prior to their delivery to consumers. The reason was open opposition of Rosneft representatives allied with FAS. The explanation was quite simple: an ample regulatory framework already exists for addressing these issues without the bill.
- immediately after the shutdown of the Druzhba oil pipeline, execution of the Government’s instruction to introduce mandatory daily control over the content of organic chlorides in the oil fed to the system was impaired by Rosneft’s unpreparedness to incur expenses on daily testing of the oil quality as well as the reluctance of Rosneft subsidiaries which heaped official notices on our company, signaling their inability to conduct daily testing due to absence of requisite devices, chemicals and specialists. In the meantime representatives of Rosneft itself stated at departmental meetings (including those in the government) that tighter control and higher frequency of testing for organic chlorides were inadvisable, since they would increase transportation tariffs and cause extra outlay;
- late in April, when the scale of the incident had not been clear yet, instead of proactive organisation of new logistics via Transneft ports, including to Rostock in Germany and Gdansk in Poland, Rosneft sent the Russian government letters claiming compensation without any documentary evidence of any real losses incurred or any real damage;
- as for the meetings held at the Energy Ministry of Russia in May, while most participants shared the opinion about the need to look for ways to resolve the situation with the Druzhba pipeline, Rosneft representatives always opposed any practical steps, insisting on the primary settlement of monetary issues. For all that, Rosneft failed to produce any documented claim amount, save for assurances that it kept rising every day. Thus the very settlement of the issue was protracted. And this is one of the reasons why transportation over the northern line of the Druzhba commenced three weeks later than was originally scheduled.
- the stance of Rosneft towards the containment of that incident’s consequences during the past month as well as the company’s promotion of rumours about repeated contaminations shape a negative image of the Russian crude in the international market. In our opinion, in this reinvented “big game” Rosneft has actually sided with Deutsche Welle and Reuters (dubbed as “units of foreign special services concerned” by Rosneft itself in its press release), that indeed publish various rumours only if these rumours bear negative connotations about Russian crude supplies. Now it appears that Rosneft does not lag far behind “its spies”, inventing similar fakes, as it did in the above-mentioned press release regarding six damaged refineries.
It turns out that Rosneft is now parroting these two media channels. One of the main results of Mr. Sechin’s visit to the Rosneft refinery in the German city of Schwedt is numerous negative releases in German media about Russian oil. We feel bitter regret about the fact that our major partner Rosneft has assumed the role of our detractor. In all of such cases they may aim at Transneft, but hit Russia instead.